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New PPF rules: Three major changes to Public Provident Fund rules from October 1

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By Vani Dua

2 min read | Updated on September 04, 2024, 11:18 IST

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SUMMARY

The Department of Economic Affairs under the Ministry of Finance recently issued a circular with the revised Public Provident Fund guidelines that will be applicable from October 1, 2024. Check the details below.

New guidelines for the Public Provident Fund (PPF) have been announced and will be applicable from October 1

New guidelines for the Public Provident Fund (PPF) have been announced and will be applicable from October 1

The Public Provident Fund (PPF) is a voluntary social security scheme in India backed by the central government. It is a popular long-term savings-cum-investment instrument.

The Department of Economic Affairs, Ministry of Finance, recently issued fresh guidelines for Public Provident Fund accounts opened in the name of minors, individuals with multiple PPF accounts and Non-Resident Indians (NRIs) extending their PPF accounts through post offices under the National Small Savings (NSS) schemes.

The ministry announced these changes through a circular released on August 21, 2024, the Economic Times reported. The changes will be applicable from October 1, 2024.

The new regulations

1. PPF account opened under a minor’s name: When a PPF account is opened under the name of a minor, Post Office Savings Account (POSA) interest will be paid until the irregular account holder turns 18 and becomes eligible for opening a PPF account. Once the account holder reaches the age of 18, regular PPF interest will be paid.

The maturity period for these accounts will be calculated from the date when the minor becomes an adult and eligible to open an account.

2. Multiple PPF accounts: The main (primary) account will be eligible for earning interest as long as the deposit stays within the annual limit. The primary account is chosen from the two accounts that an individual has chosen from any post office or agency bank after regularisation. Only these two accounts (primary and the second chosen account) will be eligible for gaining interest and all other accounts will not earn interest after they are opened.

If the balance in the primary account is below the limit, the funds from the second account will be combined with it, provided that the funds in the primary account remain under the deposit ceiling. The interest will be applied to the primary account and any excess funds (above the limit) will be returned to the second account without any interest.

3. Extension of PPF account by NRIs: The NRI PPF accounts which were opened under the Public Provident Fund Scheme (PPF), 1968, where Form H did not demand the account holder’s residency status will earn Post Office Savings Account (POSA) interest from the date the account was opened until September 30, 2024. After the specified date, the NRI accounts will earn no further interest.
Also Read: NPS vs PPF: Where should you invest for maximum gains?

About The Author

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Vani Dua is a journalism graduate from LSR College, Delhi. She is passionate about news and presently covers markets, business, economy, and other related fields. She is an avid reader and loves to spend her time weaving stories in her head.

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